EBO’s questions on downstream petroleum bill stay unanswered;
Leaving the foreign investors in limbo and delaying investments in Ghana.
The government of Ghana has been working on a Local Content Policy on the downstream petroleum for several years now.
Ghana has every right to try to maximize chances of Ghanaian entrepreneurs and Ghanaians in general.
Although EBO does not agree with some of the proposed measures and is of the opinion that some proposed measures are rather damaging for Ghana especially Ghana’s investors climate, in general EBO is positive about creating these chances for Ghanaians.
On some articles EBO has proposed alternatives and on others we have ventilated our opinion on social and other media about the proposed Local Content Policies.
A worrying part of the proposed law is that foreign investors are not allowed to be active in storage and transport of oil and oil products and won’t be allowed to deliver the same to airports and mining industry and some other restrictions.
But, laws are laws and investors will have to obey our laws.
However laws in Ghana are not (or at least not supposed to be) retroactive. Meaning in layman’s words: that laws are to be followed after implementation, in other words already operating foreign companies in the downstream sector shouldn’t be affected by these laws.
On a conference on Local Content organized by The European Business Organization (EBO) and the American Chamber of Commerce (AMCHAM), the Executive Director of EBO; Nico van Staalduinen specifically asked a declaration on the subject of the proposed Local Content Policy by a high ranking government official preferably the President, to publicly declare that Laws in Ghana are not retroactive and the proposed law will not affect the current foreign companies in the oil industry in Ghana.
EBO states that the market share of all four (4) foreign oil companies active in the downstream petroleum sector is only +/- 24% leaving 76% already in Ghanaian hands, a big chunk, bigger than in many developing and also developed countries around the world.
As a result of this, these 4 foreign companies active in Ghana have for the last few years frozen all investments, have put training and education initiatives on a lower level and have been sending out negative signals to other potential investors.
For that reason EBO is calling upon the government to come out with a clear statement towards, all the Ghanaian employees of these foreign investors in the sector and to all foreign investors that:
LAWS IN GHANA ARE NOT RETROACTIVE, YOUR INVESTMENTS ARE SAFE AND EXISTING FOREIGN OWNED COMPANIES WILL NEVER BE AFFECTED BY ANY LOCAL CONTENT POLICY, NEITHER DIRECT NOR BY CHANGING POLICIES AND RELICENCING.
Why is the Government so secretive about it and doesn’t want to comment nor declare that Ghana’s laws are not retroactive?